Still premature to talk about another Hyflux rescue attempt, court hears

Hyflux terminated a crucial rescue deal, with just weeks to go before the company loses court protection from creditors.
Hyflux terminated a crucial rescue deal, with just weeks to go before the company loses court protection from creditors. ST PHOTO: LIM YAOHUI

SINGAPORE - It is still too premature to talk about another rescue plan for water treatment company Hyflux, the High Court heard on Thursday (April 11), even as its debt moratorium expires on April 30.

Hyflux’s lawyer Manoj Sandrasegara of WongPartnership said his client has not yet decided whether the moratorium, which temporarily protects the debt-laden group from its creditors, should be extended even further.

The update comes during a case management conference at the High Court, where a packed room of lawyers representing the embattled company’s many creditors sorted out details after Hyflux aborted a $530 million rescue deal with intended white knight SM Investments last week.

Mr Manoj said: “If we do intend to apply for the moratorium to be extended, we will need about 10 days to two weeks to talk to the creditors about our next steps.”

He added that national water agency PUB had not yet issued a termination notice for its water purchase agreement with Hyflux’s subsidiary Tuaspring. 

PUB had given Hyflux an April 30 deadline to remedy its defaults, otherwise it would taking over its desalination plant at zero dollars.

Justice Aedit Abdullah then asked whether Hyflux is likely to have an option other than liquidation.

He cited a letter the court received from a retail investor Violet Seow, which stated that she had “no confidence in the restructuring attempt” and the moratorium should not be extended for too long.

In response, Mr Manoj said that his client will address these issues raised by the investor. Later on, he said that he is unable to speculate on what another restructuring attempt may look like as it is still “too premature”.

 
 
 

Justice Aedit noted that with the now-terminated deal with SM Investments, the application for court protection to allow the restructuring to take place has now deviated from its original intention.

“I have expressed on various occasions that I have to be persuaded that there is something tangible before I can extend the moratorium. It has been taking a while and I appreciate that this is a complex restructuring,” he said, urging Hyflux to reveal an alternative plan to give the court a level of certainty and concreteness to consider an extension.

“I expect that if the company want more time, that something will be put together.” 

None of the other lawyers representing Hyflux’s creditors present asked about the restructuring plan, though several summonses and application made irrelevant by the scuttled deal with SM Investments were withdrawn.

However, Mr Justin Chia of law firm Eversheds Harry Elias, who represents Ascendas Reit, said his clients have not called off two applications for the landlord to re-enter the Hyflux properties that it owns outside of the moratorium.

Ascendas Reit is the landlord of the Hyflux Building at Kallang Bahru, and the Hyflux Innovation Centre at Bendemeer Road.

“(We) have to see what the company is going to do from now on,” Mr Chia told the court, adding that the matter will be discussed in a future session.

The case conference will continue on April 25.